Digital contracts plan moves closer to reality

Casual workers toil around the clock at Kisii land registry. [Denish Ochieng/Standard]

Digital signatures could soon be recognised in legal documents as the State moves to reduce paperwork in government processes.

This is according to amendments proposed in the Business Law (Amendment) Bill, 2019 that was approved by Parliament last month and scheduled for the first reading in the House.

The omnibus Bill proposes amendments to the Business Registration and Registration of Documents Acts that will also allow entrepreneurs to register their businesses online, with the establishment of digital registries in Nairobi and Mombasa. “The registrar may establish and maintain the Principal and Coast registries in electronic forms,” says the Bill in part. If approved by Parliament, the law will allow individuals or societies to register their business entities entirely online, with the registrar further having the option to provide a searchable digital database of registered entities for public scrutiny.

At the same time, parties in an agreement can now sign and exchange contracts electronically, with the requirement that contracts should carry the company seals also removed.

This includes land purchases, where the processing of stamp duty will now be done electronically, as well as the transfer of property and securities between different parties.

Legal wills, negotiable instruments and tittle deeds will, however, still require physical signatures for them to be recognised by the law.

“Electronic signature means data in electronic form affixed to or logically associated with other electronic data which may be used to identify the signatory in relation to the data message and indicate the signatory’s approval of the information contained in the data message,” explains the Bill in part.

The Bill aims to improve Kenya’s ranking in the World Bank Ease of Doing Business Index, from the current position 56 out of 190 economies to the top 30 by 2022.